Torex books high-grade gold at EPO in Mexico

Torex Gold Resources (TSX: TXG) cut a highlight result of 20 metres grading 45.87 grams gold per tonne at its development-stage EPO underground deposit in southwest Mexico.

That result, in hole ML24-1049DA from about 890 metres depth in the area’s northern extension, included 96.6 grams silver and 4.89% copper, Torex said late Wednesday. Another hole, ML24-1048D, intersected 14.5 metres at 1.08 grams gold, 48.7 grams silver and 1.44% copper from 713 metres downhole. EPO is part of Torex’ vast Morelos complex about 180 km southwest of Mexico City.

“We view these initial results as promising, as Torex has the potential to meaningfully expand the resource at EPO and extend the mine life at Morelos beyond 2035,” Desjardins Securities mining analyst Allison Carson said in a note. “Drill highlights from the northern extension at EPO have the potential to increase the size and confidence level of the 2025 year-end resource.”

Don DeMarco, a mining analyst at National Bank Financial in Toronto, called the results a “bonanza intercept.”

Torex is carrying out a US$10-million ($13.8 million), 27,000-metre drilling program at EPO this year as it works to boost resources to the north and upgrade inferred resources to indicated. As of mid-May, crews had completed 9,430 of the planned 12,000 metres specific to EPO’s northern extension.

Expansion potential

Mineralization to the north at EPO now covers over 500 metres by 200 metres and extends vertically over 100 metres, Torex said. This outlines the potential to expand the resource and add new mining fronts at Morelos, BMO Capital Markets mining analyst Kevin O’Halloran said.

Morelos also includes the Media Luna Underground, ELG Underground and ELG open pit mines, a processing plant and related infrastructure.

Other notable intercepts released Wednesday include hole ML24-1055D, which cut 13.9 metres grading 1.34 grams gold, 67.6 grams silver and 2.05% copper from 752 metres depth.

“These latest drilling results at EPO, along with results released earlier this year at ELG Underground, Media Luna East and Media Luna West, underline the prolific nature of the Morelos property and our potential to continue to enhance and extend the reserve case production profile released in September 2024,” CEO Jody Kuzenko said.

Largely unexplored

Torex has committed about US$30 million to exploration at Morelos this year, with a focus on resource expansion and reserve replacement. The property’s 290-sq.-km area is largely unexplored.

First production from EPO remains on track for the end of 2026. Torex said it expects to produce at least 450,000 gold equivalent oz. annually through 2030 and “likely well beyond.” 

Torex shares fell 0.8% to $41.95 Thursday morning in Toronto, giving the company a market value of about $3.6 billion. The stock has traded between $19.01 and $49.25 in the past year.